Bankers advise Govt to broaden the tax base

The Barbados Bankers’ Association (BBA) is suggesting that Government broadens its tax base in order to both increase its tax intake and lower taxes.

BBA President Donna Wellington said too much emphasis was being placed on a small group of taxpayers “sitting in offices behind a desk” while several other categories of workers were not being asked to pay their just due.

“The professionals, for example, are usually the ones that are targeted. We have a lot wider society and a lot more going on than just people sitting in offices behind a desk. There are lots of people – from the coconut vendor all the way back up – people are making money in this country in all sort of different, innovative ways. And I am not actually convinced that our tax system covers everybody that is working. It only covers a part of the work force, and if we broaden then there would be more in the tax base and perhaps everybody wouldn’t have to pay as much if the tax base was wider,” Wellington said during last night’s live broadcast of the Central Bank’s economic forum, It Matters Fiscally.

She said while discussions continued about the need for Government to improve productivity, reduce inefficiencies and consolidate some state assets, serious consideration must also be given to cutting the public sector wage bill.

“There is absolutely no way we can continue at the pace we are at in terms of spending. Government’s spending is way too high given what we bring in, and every good corporation and every good entity knows we only spend what we have. That is the way you run a house. That is the way you run everything.”

Meantime, Executive Director of the Institute of Chartered Accountants of Barbados (ICAB) Reginald Farley also called for Government to urgently reduce the fiscal deficit.

Farley said Government’s high expenditure, which included transfers to some state entities, needed to be reviewed.

“One way of reducing expenditure is to reduce your debt. I am an advocate of appropriate divestment of state-own enterprises,” he said.

The former Opposition Barbados Labour Party parliamentarian also said Government was not using technology effectively to increase productivity.

“So we really need to reinvent Government, not just cut Government as Government exists because that will not achieve much, but to change the way that Government works,” Farley said.

4 Responses to Bankers advise Govt to broaden the tax base

Hal Austin February 4, 2017 at 11:15 am

Tell the BBA to come up with ideas; also ask Mr Farley what ideas he has.
In truth, Barbados urgently needs an inheritance (or death) tax, which I know Mr Farley at one point was against.
But the transfer of wealth from generation to generation, mainly through the ownership of property, is the greatest disadvantage that poor people face in Barbados.
And with a government who intervenes in the market to prop up zombie companies, mainly small, badly-managed family-owned hotels, adds enormously to this.
In fact, government and the banks should allow these loss-making hotels to go to the wall; there will always be new investors who think they can do a better job.
If IBM did not lose it mojo, there would not have been an Apple, if the UK motorcycle industry was not allowed to face competition, there would not have been a Japanese motor cycle industry.
It is through competition and the encouragement of new enterprises that we get disruption in industry and commerce.
Government has failed ordinary taxpayers: we need new and tougher housing taxes, not on small family homes, but the Bds$50m and $60m marketed in the US and Europe.
We need greater competition among lawyers and doctors, allow them to advertise, to merge, whether than to be protected through regulation.
We New Barbadians whose are now domiciled in Barbados in a more equitable way ie while living in Barbados all their worldwide earnings should be subject to local taxation.
We need to hypothecate road and petrol taxes in to a user tax which would 100 per cent fund the maintenance of the road network.
We need a visa tax, which would fund the tourism organisations. For example, a Bds$50 visa can pull in about Bds$30m without affecting the number of tourists who want to visit the country.
Look at India, the US, Australia, France, some of the most popular tourist destinations and all charge for visas.
But, fiscal policy is not the responsibility of foreign-owned banks, or book-keepers.

When an application for a visa is made, ALL applicants are required to pay an application processing fee of about UA $ 200.00 each weather or not the visa was denied. In many cases persons with approved visas are denied entry at the point of entry if the immigration officer feels like not permitting the individual for whatever reason. I think that like the Dominican Reoublic, Barbados should implement a US$ 20.00 entry fee per passenger. either paid by the airline, or directly at the airport. Only applicable to non Barbadians returning from an overseas business or pleasure or short vacation trip.

@HalAustin,,, 50 Dollar Bajan Visas sounds nice,, but
how many more or less visitors will come ashore Bimshire ???
Oh, I see You love Barbados so much, you want to run them to
St.Vincent, St.Lucia and Grenada ???
MAN, JOIN A CIRCUS, YOU CLOWN YOU !!!

Mikey,
I doubt that a single one will shy away. As I pointed out, which you obviously did not read, visa charges do not stop UK people from travelling.
You are so keen to attack, you lose all reason in the process.

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